Oil price crash sparks war of words

By Joshua CainHouston Chronicle

Published 4:17 am, Tuesday, December 30, 2014

Since the Organization of Petroleum Exporting Countries decided Nov. 27 it wouldn’t cut oil production to try to halt plummeting prices, leaders of the world’s oil powers have been taking shots at each other through the media to cast blame for the crash.

In trying to explain his country’s economic woes, Russian President Vladimir Putin proposed the theory recently that the United States and Saudi Arabia could be colluding to send oil prices plunging, according to CNN Money.

“We all see the lowering of the oil price. There’s lots of talk about what’s causing it. Could it be the agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could,” Putin said.

The price tailspin has been disastrous for Russia, the world’s largest oil and gas producer; according to the U.S. Energy Information Administration, 68 percent of the country’s export revenues came from oil and gas.

OPEC member Iran has suffered, too, and the country’s president, Hassan Rouhani, targeted Saudi Arabia in a speech in early December, calling the Saudis’ oil strategy “politically motivated.”

“Iran and people of the region will not forget such conspiracies, or in other words, treachery against the interests of the Muslim world,” Rouhani said.

But Saudi Arabia’s main voice on oil, Oil Minister Ali Al-Naimi, hasn’t budged since the OPEC decision. Many have speculated that the Saudis want the price to drop to hurt U.S. shale producers, who sparked the oil boom that helped drive prices down in the first place.

“It is not in the interest of OPEC producers to cut their production, whatever the price is. Whether it goes down to $20, $40, $50, $60, it is irrelevant,” Al-Naimi said, according to the Financial Times. Saudi Arabia and other OPEC members like Kuwait and the United Arab Emirates have maintained from even before the organization’s Vienna meeting in November that they’ll do whatever it takes to preserve their market share.

“The price will go up and the Russians, the Brazilians, US shale oil producers will take my share,” Al-Naimi said.